Brinker Capital Shutters Trio Of Absolute Return Funds

By | February 27, 2016

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In 2009, Brinker Capital launched the Brinker Capital Crystal Strategy I, which, according to Brinker, was one of the world’s first absolute return strategies packaged in the Separately Managed Account (“SMA”) format. Five years later, the firm launched three alternative mutual funds, each based on the SMA strategy, but with varying investment objectives. Now, just over two years later, all three funds are shutting down, according to a February 22 filing Brinker made with the Securities and Exchange Commission (“SEC”). The three funds in question, all categorized by Morningstar as multi-alternative funds, are the Crystal Strategy Absolute Income Fund (MUTF: CSTFX ), the Crystal Strategy Absolute Return Fund (MUTF: CSRAX ), and the Crystal Strategy Leveraged Alternative Fund (MUTF: CSLFX ). CSTFX sought to provide current income and downside protection to conventional equity markets with absolute (positive) returns over full market cycles as a secondary objective; CSRAX pursued positive (absolute) returns over full market cycles; and CSLFX sought long-term positive absolute return with reduced correlation to conventional equity markets as a secondary objective. Shortly after the three funds were launched in December 2013 , Brinker Capital Vice Chairman John Coyne said, “We had high expectations for Crystal Strategy when we launched it four years ago, but the reception of financial advisors and their clients to the product surpassed anything we could have imagined.” Mr. Coyne also said the funds were launched in response to investor requests, but for the year ending January 31, 2016, all three funds ranked in the bottom 15% of their category: CSTFX posted one-year returns of -9.09% (bottom 15%), CSRAX returned -10.42% (bottom 10%), and CSLFX returned -16.99% (bottom 1%). Thus, it’s no surprise that Brinker decided that it was in the best interests of shareholders to terminate the funds’ operations. According to the SEC filing, all three funds stopped accepting new investors on February 23, and all shares will be liquidated as of March 18. Jason Seagraves contributed to this article. Scalper1 News

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